Health, Death of Spouse and Creditors

[mallison47]

Hi, I have two questions that I hope someone can help me with.

I have a collection account for a credit card that was reported to the credit bureau in 1999, thus it will be coming off in a year or two. The collection agency has sent me a "settlement offer" offering to reduce the balance in half. If I accept this offer, would it still look bad on my credit report?

Second question, this past year, my husband committed suicide by setting himself on fire inside of my car. The car was purchased before we were married and was in my name only. However, the insurance, of course was in both of our names. Being that his death was ruled a suicide, the insurance company won't pay. The leasor (Drivetime) had heard about his death through the news and never tried to collect and were very understanding. They have charged the debt off. I have now gotten a collection letter demanding the balance of the car. I am a single mom who, on top of losing my husband in October, has had to undergo two surgeries for a benign brain tumor. I have medical bills like crazy, so I don't have another $7,000 to give them for this car. I know principal doesn't matter…but I feel like, I didn't know my husband was going to commit suicide, obviously if I would have, I would have stopped him and gotten him some help. Why should I be responsible for a car that I no longer have? Even Drivetime is willing to tell my mortgage company (I'm refinancing our home) that I had perfect credit with them throughout the time I had the car up until my husband's death. My head is just spinning!

Thanks for any help.

[Radio_Guy]

Hi Mallison47,

Welcome and I'm sorry you're having these challenges....

The short answer-

I have a collection account for a credit card that was reported to the credit bureau in 1999, thus it will be coming off in a year or two. The collection agency has sent me a "settlement offer" offering to reduce the balance in half. If I accept this offer, would it still look bad on my credit report?

Yes and it is a waste of money.

the insurance company won't pay.

Which insurance company? The Auto or Life Insurance?

Let us know...

[mallison47]

Thanks Radio Guy,

Actually both the life insurance and the auto insurance refused to pay. I knew the life insurance wouldn't pay...but I thought maybe there would be some loophole I could have with the auto insurance since their policy states they won't pay for "injuries to a person or damage to a vehicle that was caused intentionally that should have or would have been perceived to occur." Or something to that effect. The car was not in my husband's name, it was in my maiden name. He was at work and left early. How was I supposed to perceive that he would do something like this?

I have fought with the medical examiner, the detectives, etc. I have seen the autopsy report, the surveillance video, the fire marshall's report, etc. because I feel like they're missing something in the investigation. However, of course, they perceive me as the grieving widow who is in denial. I've now accepted that his death has been ruled a suicide and won't change. But at the same time, I feel like the collection agency is just adding salt to the wound.

[Methuss]

There may be a ray of light on the car issue but a lawyer may be required to fight it for you. Whose name was the car's Title in? Yours alone? If so it was YOUR property and no one else's. He was only an authorized user of your property on the policy. Since another person not an owner damaged/destroyed the vehicle, that would be vandalism and should be handled under that part of the insurance.

Keep in mind that insurance adjusters have only one purpose, to decrease the payout an insurance company makes, so they will use every excuse and deception at their disposal to refuse or reduce a claim value....that's their job.

[mallison47]

Methuss,

Your way of thinking is exactly like mine. I actually work for a law firm, but they don't handle insurance issues, so they're not sure how I should proceed. I think the way the insurance company explained it to me is that since my husband was the named-insured on the policy (I was too)...it says in the exclusions that intentional acts by an insured or family member are excluded. Since he is my husband and it was an intentional act, he's not covered. I'm also going to try the route of the lienholder being the owner. I talked to Drivetime about that as well. It will still go on my credit report, but Drivetime, as the true owner of the car, could go after the insurance and get paid. If they get paid, I don't understand why it goes against me, but so be it.

[Methuss]

Unless this was a leased vehicle, Drivetime does not own it.

There is a misconception about secured property loans that the "bank owns it." That is untrue. You own it. The lender just has a security interest in the property should you default.

Think about it. Your name is on the Title. You are responsible for taxes and plate renewals (leased vehicles have a contract provision where you agree to pay these fees for the leasing company). When you are done with the car or trade it in, you sell it not return it to the bank.

[divemedic]

Are you by any chance in Florida?